There are “no strong brands yet” to advise small businesses on legal services and law firms tend to “look the same”, Mark Edwards, vice president and general manager of Rocket Lawyer UK, has claimed.
Mr Edwards also said that alternative business structure (ABS) status was not “driving innovation” in the market, but it was supporting the most innovative firms.
Speaking at a Legal Services Board (LSB) briefing on small businesses, innovation and the need for legal advice in London yesterday, Mr Edwards said: “There are a lot of law firms out there. To many small businesses, they look the same.
“There are no strong brands yet. At the moment all you have is lots of law firm websites and lots of lawyers.”
Mr Edwards went on: “Innovation has happened in lots of other sectors. It brings more and better services and lowers costs. It is not happening as much as it should be in the legal sector.
“Why not? I don’t think lawyers are great innovators and most law firms are run exclusively by lawyers. I don’t think we’ll get much change while this remains the case.”
Mr Edwards said lawyer-only management teams often met only once a month or once a quarter.
“It is inevitable that the firms that seek out ABS status with multi-functional management teams will be the ones that innovate. I don’t think ABS is driving innovation, but it is supporting those who are being the most innovative.”
The LSB discussion was held in the wake of two major reports, the first one on innovation in legal services commissioned jointly with the Solicitors Regulation Authority, the second on the legal needs of small businesses, produced by Kingston University’s Small Business Research Centre.
Commenting on the innovation report, Warren Smith, chief executive of Access Solicitor, said: “It’s sad that the level of innovation has not moved on in five years. The more we can promote it, the more we can deliver the services that small businesses need.”
Caroline Wallace, strategy director at the LSB, said the legal profession in this country suffered from a “tremendous historic burden” and the issues were much “as much about culture as regulation”, although it did not help that the representative bodies “still had links to regulatory organisations”.
Ms Wallace said “quite a few people” interested in investing in the legal sector had complained to her that the availability of financial information about firms was “very poor”, and they struggled with valuations, whether it was work-in-progress or income.
She said the most innovative legal services providers were often the “completely unregulated ones”.
Professor Robert Blackburn, from Kingston University, described small businesses as “repeat buyers” of legal services. He said: “Once they’ve broken the ice, they are likely to go back to that person. They go back to accountants time after time.”
Professor Blackburn said small businesses regarded lawyers as expensive, even if they had never used one. “There needs to be clarity in the offerings by lawyers to small businesses and they need to overcome some of the perceptions small businesses have about them.”